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Apr 10, 2009


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SaaS (or bundled BPO) can work and would be more appropriate for mundane, run of the mill non-unique processes such as payroll, travel expense management, run-of-the-mill workflow solutions, simple accounts payable that is not tied to the company's upstream ERP processes, etc. However, as a consumer of SaaS, I would be very concerned about exit strategy, data recovery, communications security, and internal controls. I would want to make sure that the SaaS provider is SAS70 compliant and finally, I would never put my critical processes (what is critical will vary from company to company) on SaaS.

Phil, I added another POV - why is BPO itself not taking advantage of SaaS


Hi Will - very good points.

I believe it's the BPO providers who will pioneer SaaS delivery in an O model, while the ITOs ultimately view SaaS as disruptive to their revenue model (unless in niche areas where it makes sense to use a SaaS app),


As someone with recent experience both with outsourcer's approaches & SaaS + Cloud-based models, it's not yet obvious how the Outsourcers will mesh the "O" with the Cloud, let alone a full move to SaaS. At its essence, a SaaS model is at the opposite end of the software development/maintenance paradigm that outsouring providers are still largely relying upon. However, it makes a lot of sense for them to embrace it more forcefully.
SaaS and cloud-based apps are two different things, not always together.
The day when a big Outsourcer buys a Rackspace or likewise will be the day when they start to take the cloud seriously.
Re: "Does this mean they are going to invest nearly as much attention on governing these processes?". Both SaaS & Cloud-based approaches do have lower entry costs (from a user's perspective), but they still require a necessary degree of management, ramp-up and governance.

Phil -

I tip my hat to you for raising this discussion. SaaS, in concept, is incredible, and BPO can provide the flexibility to make it work effectively for businesses, supported by low-cost resources. You are correct is highlighting that there is a culture clash between technology and operations people in understanding how SaaS can be most effectively deployed. But is should prove to be a great change-agent which we so desperately need,


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